Travelpass Grp., LLC v. Caesars Entm't Corp.
Travelpass Grp., LLC v. Caesars Entm't Corp.
2021 WL 4032982 (E.D. Tex. 2021)
May 11, 2021
Craven, Caroline M., United States Magistrate Judge
Summary
The court granted in part and denied in part Defendants' Motion to Compel, ordering TravelPass to produce ESI such as deposition testimony, expert reports, responses to interrogatories, and request for admission discussing damages. The court also noted that any confidential information should be redacted in accordance with the Amended Protective Order.
Additional Decisions
TRAVELPASS GROUP, LLC, PARTNER FUSION, INC. and RESERVATION COUNTER, LLC
v.
CAESARS ENTERTAINMENT CORPORATION, ET AL
v.
CAESARS ENTERTAINMENT CORPORATION, ET AL
Case No. 5:18-cv-153-RWS-CMC
United States District Court, E.D. Texas, Texarkana Division
Signed May 11, 2021
Counsel
Barira Munshi, Christopher W. Patton, Jared Daniel Eisenberg, Samuel Butler Hardy, IV, Ruben Alan Garcia, Christopher John Schwegmann, Lynn Pinker Cox & Hurst LLP, Cory Courtney Johnson, Rebecca Lynn Adams, Lynn Pinker Hurst & Schwegmann, LLP, Dallas, TX, Jason H. Kim, Todd Schneider, Schneider Wallace Cottrell Konecky Wotkyns LLP, Emeryville, CA, Paul Joseph Stancil, Paul Stancil, Attorney, Orem, UT, for Travelpass Group LLC.Christopher W. Patton, Jared Daniel Eisenberg, Samuel Butler Hardy, IV, Christopher John Schwegmann, Lynn Pinker Cox & Hurst, LLP, Rebecca Lynn Adams, Lynn Pinker Hurst & Schwegmann, LLP, Ruben Alan Garcia, Dallas, TX, Jason H. Kim, Todd Schneider, Schneider Wallace Cottrell Konecky Wotkyns LLP, Emeryville, CA, Paul Joseph Stancil, Paul Stancil, Attorney, Orem, UT, for Partner Fusion Inc., Reservation Counter LLC.
Diane Siegel Danoff, Thomas J. Miller, Dechert LLP, Philadelphia, PA, Britton Dale Davis, Jeffrey L. Poston, Luke Van Houwelingen, Crowell & Moring LLP, Shari Ross Lahlou, Pro Hac Vice, Dechert LLP, Washington, DC, Jennifer Insley-Pruitt, Dechert LLP, New York, NY, Jordan Lee Ludwig, Crowell & Moring LLP, Los Angeles, CA, Lance Lee, Attorney at Law, Cole Alan Riddell, Jennifer Haltom Doan, Joshua Reed Thane, Haltom & Doan, Texarkana, TX, Melissa Richards Smith, Gillam & Smith, LLP, Marshall, TX, for Marriott International Inc.
Alexander G. Gray, Danielle Chattin, Emily Shoemaker Newton, Jeffrey S. Cashdan, Logan Robert Hobson, Lohr A. Beck-Kemp, Melanie C. Papadopoulos, Russell Edward Blythe, King & Spalding LLP, Atlanta, GA, Deron R. Dacus, Shannon Marie Dacus, The Dacus Firm, PC, Tyler, TX, Jennifer Haltom Doan, Haltom & Doan, Lance Lee, Attorney at Law, Texarkana, TX, Melissa Richards Smith, Gillam & Smith, LLP, Marshall, TX, Steven Mark Zager, King & Spalding LLP, Austin, TX, for Six Continents Hotels Inc.
Craven, Caroline M., United States Magistrate Judge
ORDER ON DEFENDANTS' MOTIONS TO COMPEL ARBITRATION MATERIALS AND PRIOR VALUATIONS OF TRAVELPASS
*1 The above-referenced cause of action was referred to the undersigned United States Magistrate Judge for pretrial purposes in accordance with 28 U.S.C. § 636. The following motions are pending before the Court:
Defendants' Motion to Compel (Docket Entry # 415); and
Defendants' Motion to Compel (Docket Entry # 441).
The Court, having carefully considered the relevant briefing, is of the opinion the motions should be GRANTED IN PART AND DENIED IN PART.[1]
I. BACKGROUND
Plaintiff TravelPass Group, LLC and its predecessor or related entities, Reservation Counter, LLC, and Partner Fusion, Inc. (collectively, “TravelPass” or “Plaintiffs”) are downstream online travel agencies (“OTAs”) that sell hotel rooms from different chains to consumers in the United States. Docket Entry # 1, ¶ 45. According to TravelPass, there are two types of OTAs: (1) Gatekeeper OTAs, including Expedia and Priceline, that maintain direct relationships with major hotel chains to market hotel inventory online and (2) Downstream OTAs, like TravelPass, that have affiliate agreements with Gatekeeper OTAs for access to hotel inventory. Id., ¶ 46. TravelPass' business model includes bidding on branded keyword search results to attract hotel consumers to the hotel inventory on its websites. Id., ¶ 48.
TravelPass originally filed this antitrust case against the following hotel chains: (1) Caesars Entertainment Corporation; (2) Choice Hotels International, Inc.; (3) Hilton Domestic Operating Company, Inc.; (4) Hyatt Corporation; (5) Marriott International, Inc.; (6) Red Roof Inns, Inc.; (7) Six Continents Hotels, Inc. and (8) Wyndham Hotel Group, LLC.[2] TravelPass alleges the hotel defendants “teamed up with Gatekeeper OTAs, like Expedia, with the express goal of eliminating competition for branded keyword search advertising.”Id., ¶¶ 7; 92–115.
The fact discovery deadline was December 30, 2020. Docket Entry # 382. The expert discovery deadline was May 4, 2021. Docket Entry # 457. The pretrial conference is set for October 5, 2021, with jury selection and trial scheduled October 25, 2021. Id.
II. MOTIONS TO COMPEL
A. The motions, generally
In their first motion, Defendants seek documents revealed in the course of the Rule 30(b)(6) deposition of TravelPass CEO Ryan McCoy, including (1) damages analyses related to TravelPass' arbitration and litigation with Expedia (“Expedia Arbitration”); and (2) prior valuations of TravelPass' business.[3] Following Mr. McCoy's deposition in mid-December 2020, Defendants served a letter on TravelPass on December 22, 2020, requesting that TravelPass “cure the identified deficiencies” in its prior productions. Docket Entry # 415 at pp. 3-4. The first motion to compel, which was filed on December 30, 2020, pertains to the categories of documents on which the parties could not reach agreement. Id. at p. 4, n. 1. According to Defendants, TravelPass agreed to produce certain documents and information requested in the letter and agreed that Defendants could seek relief after the close of fact discovery should TravelPass fail to produce the agreed-upon documents and information. Id.
*2 The second motion to compel, filed on February 11, 2021, pertains to the categories of documents which TravelPass originally agreed to produce, but which “TravelPass now refuses to produce ... because Expedia objects on the basis that the materials are confidential and protected from disclosure.” Docket Entry # 441 at p. 1. In their second motion, Defendants move for an order compelling TravelPass to produce the following: (1) transcripts (including exhibits) of the depositions of TravelPass fact and expert witnesses taken in the Expedia Arbitration and any additional deposition transcripts (including exhibits) in which keyword bidding restrictions were discussed, and (2) the expert report of Jason Hachkowski offered in the Expedia Arbitration and any corresponding backup and data. According to Defendants, these materials are directly relevant to the claims and defenses in this case and there is no legitimate basis for not producing them.
B. Relevant timeline
1. Expedia Arbitration
In March of 2017, TravelPass filed suit against Expedia in federal court. TravelPass Group v. Expedia, Case No. 2:17-cv-00246-TS (D. Utah March 31, 2017), Docket Entry # 2, attached as Ex. 1 to the Declaration of Genevieve Wallace (“Wallace Decl.”) attached to Non-Party Expedia, Inc.'s Motion to Intervene for the Limited Purpose of Opposing Defendants' Motion to Compel Arbitration Materials (Docket Entry # 443). According to Expedia, TravelPass' claims arose from its business relationship with Expedia, through which Expedia provides TravelPass with hotel pricing and availability information that TravelPass uses to market hotel rooms online. Id. ¶ 18. TravelPass brought claims for trade secret misappropriation and breach of a contractual confidentiality clause, alleging that a former Expedia employee had improperly disclosed confidential TravelPass information to a competitor. Id. ¶¶ 23, 49–71. In separate allegations, TravelPass also claimed that Expedia had breached other contract provisions by seeking to restrict TravelPass' keyword bidding in online search advertising. Id. ¶¶ 31–32.
Expedia initiated AAA arbitration to resolve these claims pursuant to the parties' arbitration agreement. An arbitral panel took jurisdiction, and the Utah court stayed TravelPass' federal suit.[4] According to Expedia, from 2017 through 2020, Expedia and TravelPass conducted the private Arbitration under “stringent confidentiality protections that both the parties and the arbitral panel agreed were necessary due to the sensitive subject matter and putative trade secrets at issue in the arbitration.” Docket Entry # 443 at p. 1.
Specifically, at the outset of the Expedia Arbitration, “the parties agreed to a Protective Order, entered by the arbitral panel, which imposed rigorous confidentiality protections.” Id. at p. 3 (citing Wallace Decl., Ex. 2). The Protective Order, which Expedia states remains in force, provides that “this arbitration is a confidential arbitration” and “[t]he parties agree to take reasonable steps to ensure that no documents or information will be disclosed other than to persons involved in this arbitration and that the documents and information provided in this arbitration will be used solely for purposes of this arbitration.” Id. ¶ 1.1. Because the Expedia Arbitration involved alleged trade secrets and sensitive information, the Protective Order recognized that “discovery activity in this action may involve production of highly confidential information, for which special protection from disclosure is required.” Id. ¶ 1.2
To ensure the confidentiality of pleadings, depositions, and documents exchanged in discovery during the Arbitration (“Arbitration Materials”), the Protective Order sets out the provisions regarding access to and use of Arbitration Materials. Id. ¶ 7; see also id. ¶ 7.1. (“A Receiving Party may use Arbitration Materials only for prosecuting, defending, or attempting to settle this arbitration.”). The Protective Order further provides that if a party is served with a subpoena or a court order issued in other litigation that compels disclosure of Arbitration Materials, the party must promptly notify in writing the producing party, as well as the party who caused the subpoena or order to issue in the other litigation (including a copy of the Protective Order, refusing to produce any Arbitration Materials, and cooperating with respect to all reasonable procedures sought to be pursued by the producing party whose Arbitration Materials may be affected). Id. ¶ 8.
2. Procedural background in this litigation
*3 In this case, Defendants originally sought to obtain all documents produced by TravelPass in the Expedia Arbitration. See Docket Entry # 181 (filed August 23, 2019). On January 16, 2020, the Court denied Defendants' Joint Motion to Compel, concluding as follows:
Here, the Court declines to make a determination at this time whether all of the requested electronic documents previously produced are relevant to the claims or defenses in this case. Plaintiffs concede much of it may be. However, the Court finds that an informal request that seeks wholesale duplicates of discovery produced in other litigation is improper as failing to make the requisite showing of relevance. Defendants are not entitled to the wholesale reproduction of all of the ... Expedia Documents simply because there may be overlap between the issues in those cases and those in this case. In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig., 2017 WL 4680242, at *1. Instead, Defendants must serve requests for production on TravelPass in accordance with the Federal Rules and as anticipated by the E-Discovery Order negotiated by the parties and entered by the Court. Id. at *2.
Docket Entry # 262 at pp. 12-13.
3. Parties' assertions
a. TravelPass' assertions
According to TravelPass, Defendants thereafter sought the same documents from TravelPass by including ESI search terms related to Expedia. TravelPass states it produced thousands of TravelPass documents that were also produced to Expedia in the Arbitration. TravelPass states Defendants also received more than 25,000 documents directly from Expedia.[5] In addition, TravelPass asserts Defendants have deposed TravelPass witnesses about the substance of the Expedia Arbitration, and the claims, defenses, and damages alleged in that case.
TravelPass further asserts as follows. In November of 2020, Defendants demanded that TravelPass produce all of the TravelPass deposition transcripts from the Expedia Arbitration. According to TravelPass, most of that testimony is irrelevant, and all of it is protected from disclosure by the Protective Order entered in the Expedia Arbitration. However, to avoid any additional court intervention and potential delay, TravelPass states it agreed to produce those transcripts subject to Expedia's consent. According to TravelPass, Expedia objected to the production of the transcripts and the later-requested expert materials. See Docket Entry # 444, Ex. A, email from Expedia to TravelPass (Jan. 26, 2021). TravelPass thereafter informed Defendants that it would “comply with [Expedia's] request to withhold production” and reasserted its relevancy objection. See id., Ex. B, email from TravelPass' counsel to Defendants' counsel (Jan. 26, 2021).
b. Defendants' assertions
*4 According to Defendants's first motion to compel, they first requested certain deposition transcripts of relevant TravelPass witnesses from the Expedia Arbitration on November 18, 2020, after learning in the course of depositions in this matter that certain TravelPass witnesses were previously deposed. Defendants followed up again in the following weeks, and TravelPass' counsel ultimately agreed on December 29, 2020 to produce all of the deposition transcripts of TravelPass' witnesses from the Expedia Arbitration “subject to Expedia's consent” pursuant to the Protective Order in that case. On January 5, 2021, counsel for Defendants, Expedia, and TravelPass met and conferred, and counsel for Expedia committed to promptly ask for Expedia's consent for TravelPass to disclose the transcripts. According to Defendants, TravelPass' counsel reaffirmed this position in subsequent negotiations, including on a meet and confer call conducted on January 26, 2021.
Separately, on December 30, 2020, Defendants and TravelPass exchanged expert reports. TravelPass has proffered the expert opinion of Jason Hachkowski “on the nature of keyword bidding... as well as the impact to competition in SEM [Search Engine Marketing].” Upon receiving Mr. Hachkowski's expert report in this case, Defendants learned that Mr. Hachkowski also provided an expert opinion (accompanied by a written report) in the Expedia Arbitration, which Defendants state contain the same highly relevant topics. According to Defendants, TravelPass has never objected to producing any of the material sought by the second motion to compel. Defendants assert “TravelPass has repeatedly punted the question to Expedia, which has argued that the materials are covered by the protective order in the Expedia arbitration proceeding.” Docket Entry # 441 at p. 2.
On January 26, 2021, Expedia refused to consent to TravelPass' production of the requested materials. According to Defendants, in a follow-up communication on February 2, 2021, Expedia offered to give consent, but only if Defendants paid for Expedia's counsel to redact supposedly “irrelevant” information from the documents. On a final meet and confer call held on February 9, 2021 joined by counsel for Expedia, Defendants, and TravelPass (and in a confirmatory communication on February 10, 2021), Expedia reiterated its refusal to consent to the production of any of the requested material unredacted. TravelPass also confirmed it would stand behind Expedia's objection.
c. Expedia's assertions
After making its June 2020 document production, Expedia was aware that Defendants sought additional Arbitration Materials from TravelPass, including deposition transcripts, expert reports, written discovery responses, and the settlement agreement that concluded the Arbitration. According to Expedia, as required under the Protective Order, TravelPass regularly sought Expedia's consent to produce these materials. However, unbeknownst to Expedia, on January 21, 2021, TravelPass produced to Defendants the expert report of TravelPass' expert David Leathers from the Expedia Arbitration (the “Leathers Report”).
Expedia states TravelPass sought Expedia's consent, on January 26, 2021, to produce most of the materials Defendants seek in their first motion to compel, namely: (i) the Leathers Report and the backup documents and data to the Leathers Report, (ii) the expert report of Jason Hachkowski (“Hachkowski Report”) and corresponding backup documents and data, (iii) all TravelPass fact and expert deposition transcripts, and (iv) any interrogatory responses relating to TravelPass' damages claims against Expedia. According to Expedia, TravelPass did so without disclosing that it had already produced the Leathers Report, and without mentioning that Defendants had already moved to compel these materials. Expedia declined to provide consent, citing the Protective Order in the Expedia Arbitration and arguing the materials requested are irrelevant.
*5 Also on January 26, 2021, Defendants requested Expedia's consent for TravelPass to produce deposition transcripts and expert materials from the Expedia Arbitration (specifically the Leathers report backup and the Hachkowski report and backup). Expedia contends Defendants likewise did not inform Expedia of any pending motion to compel these materials from TravelPass; to the contrary, they indicated they would file a motion to compel if they did not receive Expedia's consent. Id. Expedia again withheld consent, citing the Expedia Arbitration's Protective Order and arguing many of the materials sought are irrelevant. During a call with Defendants' counsel two days later, on January 28, 2021, Defendants' counsel indicated that TravelPass had produced the Leathers Report, alerting Expedia for the first time that it had been produced without Expedia's consent.
On February 2, 2021, Expedia offered to produce redacted versions of the deposition transcripts and expert materials Defendants sought—in which the content irrelevant to this action would be redacted—so long as Defendants covered the cost of preparing the redactions. Defendants rejected this proposal.
On February 3, Expedia inquired with counsel for TravelPass about a sealed motion to compel that had appeared on the docket. In response to Expedia's question—and for the first time despite Expedia's ongoing conversations with both TravelPass and Defendants—TravelPass disclosed that Defendants had moved to compel the Leathers Report and other damages-related Arbitration Materials.
According to Expedia, on February 6, 2021, Expedia requested that Defendants consent to staying Defendants' first motion to compel so that Expedia could examine the materials at issue and confer with Defendants in order to reach resolution or, if resolution was not possible, move to intervene. On February 9, 2021, Expedia conferred telephonically with the parties, and Defendants advised that they would oppose any stay of Defendants' first motion to compel. Defendants also indicated they would oppose any request to redact the materials sought in Defendants' motions. Defendants later clarified they would oppose any motion by Expedia to intervene in opposition to Defendants' motions to compel.
On February 11, 2021, Defendants filed their second motion to compel TravelPass' production of Arbitration Materials, seeking the report of a second TravelPass expert from the Expedia Arbitration (“the Hachkowski Report”), backup materials to that expert report, and the transcripts of all depositions in the Arbitration that were taken of any witness—TravelPass or not—that include references to keyword bidding, plus all exhibits to those depositions. Docket Entry # 441. According to Expedia, this “motion would reach transcripts of Expedia witnesses, as well as other third parties involved in the Arbitration.” Docket Entry # 443 at p. 6.
On March 20, 2021, the Court entered an order granting Expedia's motion, allowing Expedia to intervene for the limited purpose of opposing Defendants' motions to compel Arbitration Materials. See Docket Entry # 458.
III. APPLICABLE LEGAL STANDARDS GOVERNING DISCOVERY
“The goal of discovery is to maximize relevant, nonprivileged matter while avoiding excess, non-relevant or privileged information.” Drake v. Capital One, National Association, Civil Action No. 4:16-CV-00497, 2017 WL 1319560, at *1 (E.D. Tex. April 10, 2017). Federal Rule of Civil Procedure 26(b) provides that the permissible scope of discovery includes “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.” Matter of AET, Inc., Ltd., Civil Action No. 1:10-CV-51, 2018 WL 4201264, at *2 (E.D. Tex. June 8, 2018) (quoting FED. R. CIV. P. 26(b)(1)).
*6 In the Eastern District of Texas, Local Rule CV-26 also provides guidance in considering whether information is relevant for discovery. The rule provides information is relevant if:
(1) it includes information that would not support the disclosing parties' contentions;
(2) it includes those persons who, if their potential testimony were known, might reasonably be expected to be deposed or called as a witness by any of the parties;
(3) it is information that is likely to have an influence on or affect the outcome of a claim or defense;
(4) it is information that deserves to be considered in the preparation, evaluation or trial of a claim or defense; and
(5) it is information that reasonable and competent counsel would consider reasonably necessary to prepare, evaluate, or try a claim or defense.
Matter of AET, 2018 WL 4201264, at *2 (quoting E.D. Tex. Local Rule CV-26(d)). Relevance “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case.” Id. (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (citing Hickman v. Taylor, 329 U.S. 495, 501 (1947))).
Federal Rule of Civil Procedure 37 allows a discovering party, on notice to other parties and all affected persons, to “move for an order compelling disclosure or discovery.” Star Creek Ctr., L.L.C. v. Seneca Ins. Co., Inc., Civil Action No. 4:17-CV-00607, 2018 WL 1934084, at *1 (E.D. Tex. Apr. 23, 2018) (quoting FED. R. CIV. P. 37(a)(1)). The moving party bears the burden of showing that the materials and information sought are relevant to the action or will lead to the discovery of admissible evidence. Star Creek, 2018 WL 1934084, at *1 (citing Export Worldwide, Ltd. v. Knight, 241 F.R.D. 259, 263 (W.D. Tex. 2006)). Once the moving party establishes that the materials requested are within the scope of permissible discovery, the burden shifts to the party resisting discovery to show why the discovery is irrelevant, overly broad, unduly burdensome or oppressive, and thus should not be permitted. Id.
The federal rules follow a proportionality standard for discovery. Van Dyke v. Retzlaff, Civil Action No. 4:18-CV-247, 2020 WL 1866075, at *1 (E.D. Tex. Apr. 14, 2020) (citing FED. R. CIV. P. 26(b)(1)). Under this requirement, the burden falls on both parties and the Court to consider the proportionality of all discovery in resolving discovery disputes. Id. (citing FED. R. CIV. P. 26(b)(1), advisory committee note (2015)). This rule relies on the fact that each party has a unique understanding of the proportionality to bear on the particular issue. Id. For example, a party requesting discovery may have little information about the burden or expense of responding. Id. “The party claiming undue burden or expense ordinarily has far better information—perhaps the only information—with respect to that part of the determination.” Id.
IV. DISCUSSION
A. Whether there is good cause to alter the existing schedule
1. Applicable law
The Court's Sixth Amended Docket Control Order established December 30, 2020 as the fact discovery deadline. Docket Entry # 382. Defendants filed their first motion to compel on December 30, 2020 and their second motion to compel on February 11, 2021, after the expiration of the deadline for completing all non-expert discovery.
*7 Under Federal Rule of Civil Procedure 16(b), federal courts have the clear authority to control and expedite the discovery process through a scheduling order. Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990). Consistent with the authority vested in the district court by Rule 16, the trial court is granted broad discretion to preserve the integrity and purpose of such pretrial orders. See id. (quoting Hodges v. United States, 597 F.2d 1014, 1018 (5th Cir. 1979)); see also Bilbe v. Belsom, 530 F.3d 314, 317 (5th Cir. 2008) (affording district courts a great deal of deference in determining whether to modify scheduling orders especially where the record suggests the movant repeatedly demonstrated a lack of diligence). Scheduling orders and their enforcement are regarded as essential in ensuring that cases proceed to trial in a just, efficient, and certain manner. Gauthier v. Union Pac. R.R. Co., Civil Action No. 1:07-CV-12 (TH/KFG), 2009 WL 10676647, at *3 (E.D. Tex. Mar. 10, 2009) (citing Hernandez v. Mario's Auto Sales, Inc., 617 F. Supp. 2d 488, 495 (S.D. Tex. 2009) (citations omitted)).
Federal Rule of Civil Procedure 16(b)(4) provides that deadlines in a schedule “may be modified only for good cause and with the judge's consent.” The Fifth Circuit has “interpreted Rule 16(b)(4)'s ‘good cause’ standard to require the movant to ‘show that the deadlines cannot reasonably be met despite the diligence of the party needing the extension.’ ” Puig v. Citibank, N.A., 514 Fed. Appx. 483, 2013 WL 657676, at *5 (5th Cir. Feb. 22, 2013) (quoting S & W Enterprises, L.L.C. v. Southtrust Bank of Alabama, NA, 315 F.3d 533, 535 (5th Cir.2003)).
The Fifth Circuit has stated four factors trial courts must consider when determining whether good cause exits to allow a deviation from the court's scheduling order: (1) the explanation for the failure to meet the deadline; (2) the importance of the modification of the deadline; (3) potential prejudice in allowing the modification; and (4) the availability of a continuance to cure such prejudice. Reliance Ins. Co. v. The Louisiana Land & Exploration Co., 110 F.3d 253, 257 (5th Cir.1997); Geiserman, 893 F.2d at 791.
2. Discussion
In assessing good cause, the trial court primarily considers the diligence of the party seeking to alter the existing schedule. See Deghand v. Wal-Mart Stores, Inc., 904 F. Supp. 1218, 1221 (D. Kan.1995); see also Smith v. BCE, Inc., 225 Fed. Appx. 212, 217 (5th Cir. 2007). The party's explanation for seeking relief from the schedule must demonstrate that it could not have met the deadline despite its diligence. The Court finds Defendants' explanation demonstrates it could not have met the deadline despite its diligence.
According to Defendants's first motion to compel, they first requested certain deposition transcripts of relevant TravelPass witnesses from the Expedia Arbitration on November 18, 2020, after learning in the course of depositions in this matter that certain TravelPass witnesses were previously deposed. Defendants followed up again in the following weeks, and TravelPass' counsel ultimately agreed on December 29, 2020 to produce all of the deposition transcripts of TravelPass' witnesses from the Expedia Arbitration “subject to Expedia's consent” pursuant to the Protective Order in that case.
Additionally, Defendants state they learned in the December 18, 2020 deposition of Mr. McCoy that TravelPass had failed to produce relevant, non-privileged assessments of TravelPass' damages in its arbitration with Expedia, as well as a prior valuation of TravelPass' business. According to Defendants, during the course of his deposition, Mr. McCoy testified that TravelPass retained an expert to calculate damages from Expedia's alleged conduct and, in consultation with TravelPass' counsel, verbally disclosed during the deposition an estimate of that expert's damages calculation. See Docket Entry # 415 at p. 5 (citing McCoy Dep. Rough Tr. (“Ex. A”) at 137:3-19).
*8 Defendants promptly served a letter on TravelPass, requesting TravelPass “cure the identified deficiencies.” Docket Entry # 415 at p. 4. The first motion to compel, which was filed ten days later on the last day for fact discovery, pertains to the categories of documents on which the parties could not reach agreement. Docket Entry # 415 at p. 4, n. 1. According to Defendants, TravelPass agreed to produce certain documents and information requested in the December 20, 2020 letter and agreed that Defendants could seek relief after the close of fact discovery should TravelPass fail to produce the agreed-upon documents and information. Following Expedia's objection to those agreed-upon documents which TravelPass originally agreed to produce, Defendants filed the second motion to compel on February 11, 2021.
The Court finds this factor weighs in favor of modifying the docket control order for the limited purpose of re-opening fact discovery as to the discovery now sought by Defendants in their motions to compel. Having further considered the importance of the requested modification, as well as the potential prejudice to TravelPass and the firm trial setting in October, the Court finds good cause to allow this limited deviation. The Court now considers the substance of Defendants' motions to compel, starting with the Expedia Arbitration documents.
B. Analysis
1. Expedia Arbitration documents
a. Assertions
As noted above, TravelPass previously sued Expedia directly, in 2017, claiming, in part, that Expedia “collud[ed]” with Defendants “to restrict competition in the keyword search advertising market.” See TravelPass Group, LLC v. Expedia, Inc., Case No. 2:17-cv-00246 (D. Utah Mar. 31, 2017), Docket Entry # 2, ¶¶ 31–33. In the two pending motions to compel, Defendants are requesting the following specific items related to the Expedia Arbitration: (1) TravelPass fact or expert witness deposition testimony (and exhibits) from the Expedia Arbitration; (2) Expedia witness deposition testimony (and exhibits) from the Expedia Arbitration that relates to keyword bidding; and (3) the backup material and data supporting TravelPass' Arbitration expert David Leathers; (4) the report and backup material and data supporting TravelPass' Arbitration expert Jason Hachkowski; and (5) any TravelPass responses to interrogatories or request for admission discussing damages. See Docket Entry #s 415, 441.
According to Defendants, in its lawsuit against Expedia, TravelPass claimed that Expedia was responsible for the same type of harm and damages that TravelPass now attempts to lay at the feet of Defendants in this case. Defendants assert TravelPass' damages analyses from the Expedia Arbitration “are important in evaluating TravelPass' allegations that any diminution in the value of its company should somehow be attributed to Defendants rather than Expedia, and also important in evaluating the amount and extent of such damage, if any.” Docket entry # 415 at p. 5. Defendants further assert the production of these damages analyses would not impose any burden on TravelPass because the materials have been previously prepared in the Expedia Arbitration.
TravelPass and Expedia make similar claims in opposition to Defendants' motions, both arguing that most of the materials Defendants seek are irrelevant to this case; Defendants' requests cannot satisfy the proportionality standard; and Defendants' requests intrude upon the confidentiality of the proceedings between TravelPass and Expedia. In its response, TravelPass states it has already produced the TravelPass/Expedia settlement agreement and damages-related corporate representative testimony from that matter, and it has also agreed in principle to produce the final damages expert report from that litigation. Docket Entry # 427 at pp. 1-2. According to TravelPass, any other damages “estimates” or “analyses” are both irrelevant and protected from production under the Federal Rules of Civil Procedure and this Court's Amended Discovery Order. Id. at p. 2. TravelPass further asserts it would have to conduct a “burdensome and careful review of any such ‘estimates’ or ‘analyses’ before producing the information because it would implicate Expedia's confidentiality interests.” Id. at pp. 2-3.
*9 Regarding relevance, TravelPass states the predominant claims in the Expedia Arbitration involved the allegedly improper use and disclosure of TravelPass' data to a competitor. Noting Defendants seek the entire transcripts of TravelPass witnesses in the TravelPass/Expedia arbitration, plus expert materials, regardless of the fact that a substantial portion of that testimony and evidence has nothing to do with keyword bidding or the claims and defenses in this case, TravelPass argues Defendants' request is overbroad and non-proportional. Docket Entry # 444 at p. 3 (citing Matter of AET, Inc., Ltd., Civil Action No. 1:10-CV-51, 2018 WL 4201264, at *2 (E.D. Tex. June 8, 2018) (permissible discovery includes “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case”) (quoting Fed. R. Civ. P. 26(b)(1))).
Expedia also argues the requests are overbroad and non-proportional, further asserting as follows:
This Court previously recognized, in this case, that it is improper for Defendants to indiscriminately seek Arbitration Materials without regard for their relevance, yet that is exactly what Defendants are doing again here. In denying Defendants' previous motion to compel all documents TravelPass had produced in the Arbitration, the Court made clear that ‘asking for all documents produced in another matter is not generally proper.’ Dkt. No. 262 at 10 (citing Goro v. Flowers Foods, Inc., 2019 WL 6252499, at *18 (S.D. Cal. Nov. 22, 2019)). As this Court held, ‘Defendants are not entitled to the wholesale reproduction of all of the FTC Documents and Expedia Documents simply because there may be overlap between the issues in those cases and those in this case.’ Id. at 12. The same is true again now, where Defendants are seeking the entirety of TravelPass witnesses' deposition testimony in the arbitration, the entirety of any witnesses' deposition testimony in the arbitration if it so much as touches on keyword bidding or damages, and the entirety of the Hachkowski and Leathers Report and backup materials, without regard to the irrelevance of substantial portions of those materials.
While it is true that excerpts of the materials Defendants seek could be relevant to this proceeding, such information is limited because the keyword bidding issues in the arbitration were of secondary importance and attention. And even this limited relevant material should not be produced here, because it does not meet the proportionality standard.... There is no particular importance of these deposition transcripts to this case given that Defendants have already taken the same witnesses' depositions themselves or, more strikingly, noticed them and then decided they were not worth taking.... Not only does their apparent unimportance weigh against discovery, there is also a substantial burden because the discovery would invade a private Arbitration conducted by both the parties and arbitral panel in reliance on well-founded expectation of confidentiality. The modest amount of relevant information pertaining to TravelPass's secondary keyword bidding-related claim does not warrant Defendants' indiscriminate intrusion into confidential Arbitration Materials.
Docket Entry # 443 at pp. 12-13 (emphasis original).
TravelPass further argues such information is cumulative because Defendants have already deposed all of the same witnesses in this case, including the deposition of Mr. Hachkowski. According to TravelPass, many of those witnesses were also deposed in the Expedia Arbitration, and Defendants questioned those witnesses about the Expedia Arbitration and any overlapping, relevant issues. Expedia similarly argues as follows:
Defendants had every opportunity in this case to take the deposition of each person whose transcript they are now seeking from the Arbitration. Indeed, with regard to the TravelPass witnesses whose deposition transcripts Defendants seek, Defendants did take the witnesses' depositions. Defendants also had the opportunity to depose any Expedia witnesses they believed had relevant knowledge. Indeed, Defendants noticed depositions for several Expedia witnesses and then voluntarily dropped them, without ever mentioning to Expedia that Defendants would later be seeking these witnesses' deposition transcripts from the Arbitration. Wallace Decl., Ex. 15 and ¶ 21.
*10 Docket Entry # 443 at pp. 13-14 (emphasis original).
Additionally, both TravelPass and Expedia contend the requested discovery would invade a private arbitration conducted by both the parties and arbitral panel in reliance on an agreed expectation of confidentiality. See Docket Entry # 443-4 (TravelPass/Expedia Protective Order, “[T]he documents and information provided in this arbitration will be used solely for purposes of this arbitration.”) (emphasis added by TravelPass). Both TravelPass and Expedia assert that, if produced, the Arbitration Materials should be redacted at Defendants' expense to exclude confidential information irrelevant to this action.[6]
As to this last argument, Defendants respond as follows:
... Expedia claims that it would be onerous for it to ‘monitor’ the exchange of documents and testimony to ensure each's confidentiality. See Reply at 5. First, asking Expedia to ‘monitor proceedings in which it is not a party’ is hardly an undue burden. See id. at 2. And critically, Expedia still has not provided any specific reason why the Outside Attorneys' Eyes Only designation that it insisted upon including in the Amended Agreed Protective Order is insufficient. Rather, Expedia only argues that certain of the material is (in Expedia's opinion) ‘irrelevant.’ Expedia produced its Rule 30(b)(6) deposition transcript from the Arbitration with an Outside Attorneys' Eyes Only designation, and, as Expedia notes, outside counsel for Defendants have already reviewed the Leathers arbitration report under the same designation. Expedia does not allege or even suggest that Defendants have not abided by their Protective Order obligations as to these materials. And Expedia can point to nothing allegedly ‘irrelevant’ in these documents that raises any particularized confidentiality concerns. Moreover, there is no basis under the law for Expedia to redact irrelevant information from otherwise highly relevant documents to this litigation. See Def. Opp. at 15. The Court should ... grant Defendants' motions to compel.
*11 Docket Entry # 453 at p. 5 (internal footnote omitted).
b. Discussion
As an initial matter, Defendants have met their burden to show the requested information is relevant. TravelPass concedes that at least excerpts of these materials could be relevant. Expedia has expressed confidentiality concerns and argue, should be Court grant some or all of Defendants' motions, redactions of irrelevant information would be appropriate. The Court is unconvinced that Expedia (or TravelPass) may unilaterally redact information it believes is irrelevant. See U.S. ex rel. Simms v. Austin Radiological Ass'n, 292 F.R.D. 378, 386-87 (W.D. Tex. 2013) (noting “the best solution [was] for ARA to produce unredacted versions of its documents, subject only to redactions for privilege and for information related to non-government payors in its financial and accounting materials only). The court in Simms further noted “[a]ny concerns regarding confidentiality [we]re sufficiently addressed by the protective order in th[e] suit.” Id. at 387.
In this case, Defendants assert Expedia has not explained why the Outside Attorneys' Eyes Only designation that it insisted upon including in the Amended Agreed Protective Order is inadequate to ensure confidentiality. The Court concludes the Amended Agreed Protective Order in this case sufficiently addresses Expedia's concerns regarding confidentiality. As held by the court in Simms, any documents ordered produced herein will be subject only to redactions for privilege.
Although relevant, the Court must also consider proportionality. According to Defendants, the materials are “readily available and can be produced by TravelPass; Defendants are not asking Expedia to conduct any burdensome search.” Docket Entry # 453 at p. 2 (emphasis original). Defendants state most of the Arbitration Materials they seek are testimony of TravelPass' witnesses and TravelPass' expert reports.
The Court grants Defendants' motion to compel production of TravelPass fact or expert witness deposition testimony (and exhibits) from the Expedia Arbitration, as well as any TravelPass responses to interrogatories or request for admission discussing damages.[7] However, with regard to Defendants' request for all deposition transcripts of Expedia witness deposition testimony (and exhibits) from the Expedia Arbitration that relates to keyword bidding, the Court has concerns with the proportionality of such request and thus denies that part of Defendants' second motion to compel.
The Court grants Defendants' motion to compel the expert report of Jason Hachkowski offered in the Expedia Arbitration. However, the Court denies Defendants' motion to compel the corresponding backup material and data of Hachkowski's report. Similarly, the Court denies Defendants' request for the backup material and data supporting TravelPass' Arbitration expert David Leathers.
*12 According to TravelPass, its damages expert specifically controlled for other damage factors, including the separate damages that could have been attributable to the Expedia trade secret action. TravelPass argues Defendants were able to explore any aspects of Mr. Leather's report in his deposition, but they are not “entitled to a full Rule 26 ‘expert disclosure’ from a separate litigation, with separate claims, and alleging separate harms.” Docket Entry # 437 at pp. 2-3 (citing Cartier, Inc., et al. v. Four Star Jewelry Creations, Inc., Civil Action No. 01 Civ.11295 (CBM), 2003 WL 22227959, *3 (S.D.NY. Sept. 26, 2003) (“Rule 26(b) does not mandate the disclosure of any additional reports that the expert may have prepared” nor does Rule 26 “tolerate discovery requests ‘based on pure speculation or conjecture’ ”)).
The Court is not convinced TravelPass is obligated to produce the backup material related to the Expedia reports. Nor is the Court persuaded Defendants need the supporting data and documents from the Expedia reports in order to determine whether Mr. Leathers adequately “controlled for” the damages he believes were caused by Expedia.[8] Therefore, this part of Defendants' motions is denied.
2. Prior valuations of TravelPass' business
a. Parties' assertions
As part of their first motion to compel, Defendants also seek an order compelling the production of what TravelPass characterizes as a “privileged draft appraisal report included on Plaintiffs' privilege log (the ‘Hyde Report’).” Docket Entry # 427 at p. 3. According to Defendants, Mr. McCoy testified at his deposition that TravelPass engaged a third party, Hyde Valuations, to conduct a business valuation of TravelPass “as part of a corporate restructure” TravelPass performed in 2015 or 2016. Docket Entry # 415 at p. 5 (citing Dec. 18, 2020 Rough Tr. (Ex. C) at 98:19-99:18). Defendants assert Mr. McCoy's counsel confirmed the existence of such valuation, but refused to permit Mr. McCoy to testify regarding the amount of the valuation on privilege grounds. Id. (citing Rough Tr. (Ex. D) at 99:21-100:14). Defendants state they do not seek any legal advice, but they do seek the amount of the valuation and basis for that valuation.
According to Defendants, regardless of whether attorneys were involved in TravelPass' corporate reorganization, there is no basis to withhold the Hyde valuation itself on privilege grounds—Hyde Valuations is a business appraisal firm, not a law firm. Defendants further argue TravelPass put the valuation of its company squarely at issue in this matter when it alleged as a basis for its damages in this action a decline in TravelPass' business valuation, and all valuations of the company, especially contemporaneous business valuations conducted at the direction of TravelPass itself, are relevant and must be considered when evaluating TravelPass' damages claims. Defendants request that the Court compel TravelPass to produce any and all prior valuations of its business, including the Hyde valuation. To the extent TravelPass persists in asserting that the Hyde valuation—or any other valuation—is privileged, Defendants request in camera review of the valuation to determine whether the requested information is in fact protected from disclosure.
*13 TravelPass asserts Mr. McCoy testified that the Hyde Report was created at the request of TravelPass' outside counsel to be used for assessing the tax implications of a noncontrolling share in Partner Fusion, Inc., and inform the preparation of corporate tax returns following the restructuring. Docket Entry # 427 at p. 4. In other words, TravelPass argues “the Hyde Report is privileged material created by a third party at the request of counsel to ‘assist an attorney in rendering legal advice.’ ” Id. (quoting Ferko v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 218 F.R.D. 125, 139 (E.D. Tex. 2003) (“So long as an attorney hires an accountant or financial professional for a specific purpose that relates significantly to the disputed communications or documents at issue, any documents disclosed to such a professional and any communications regarding those documents are privileged.”).
b. Attorney-client privilege
“A party asserting a privilege exemption from discovery bears the burden of demonstrating its applicability.” Moser as Tr. of Tr. Under Amended Joint Plan of Liquidation of Tango Transp., L.L.C. v. Navistar Int'l Corp., Civil Action No. 4:17-CV-00598, 2019 WL 236722, at *2 (E.D. Tex. Jan. 16, 2019) (quoting In re Santa Fe Int'l Corp., 272 F.3d 705, 710 (5th Cir. 2001)). “A general allegation of privilege is insufficient to meet this burden.” Id. (quoting Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 473 (N.D. Tex. 2004)). Instead, “[t]he proponent must provide sufficient facts by way of detailed affidavits or other evidence to enable the court to determine whether the privilege exists.” Id.
Under federal law, the elements of the attorney-client privilege are “(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of a bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.” Id. (quoting Stoffels v. SBC Commc'ns, Inc., 263 F.R.D. 406, 411 (W.D. Tex. 2009) (quoting In re Grand Jury Proceedings, 517 F.2d 666, 670 (5th Cir. 1975))).
In Ferk o, the court addressed the issue of whether the attorney-client privilege applies to documents disclosed by attorneys to accountants. Id. at *2 (citing Ferko, 219 F.R.D. at 134–35). The court in Ferko found, “an attorney claiming the attorney-client privilege for communications between an attorney and an accountant or for documents prepared by an accountant for an attorney must prove that the accounting services enabled the giving of legal advice.” Id. (quoting Ferko, 219 F.R.D. at 135 (citing United States v. Davis, 636 F.2d 1028, 1043 n.17 (5th Cir. Unit A Feb. 1981); United States v. Pipkins, 528 F.2d 559, 562 (5th Cir. 1976))). In the Moser case, Navistar's attorneys provided information to KPMG concerning ongoing and threatened litigation for an audit, and the court held the accounting services enabled the giving of accounting advice, not legal advice. Id. Therefore, the court found that the attorney-client privilege did not apply to the documents. Id.
Here, Mr. McCoy states the “draft appraisal Hyde Report at issue was requested by TravelPass's outside corporate counsel, Gary Longmore, shareholder at Ray Quinney & Nebeker, P.C.” because the “companies were restructuring by engaging in a sale of assets from Partner Fusion, Inc. to TravelPass Group, LLC, as well as a sale of ... Reservation Counter, LLC to TravelPass Group, LLC.” Affidavit of Ryan McCoy (“McCoy Aff.”), ¶¶ 5-6. Mr. McCoy further represents as follows:
*14 7. Mr. Longmore requested the creation of the Hyde Report as a source of information to consider in assessing the tax implications of a noncontrolling share in one of those entities, Partner Fusion, Inc., and to inform the preparation of corporate tax returns following the restructuring.
8. The Hyde Report was requested for tax purposes only—to provide guidance on the tax liability of a minority employee interest in Partner Fusion, Inc.—and was expressly not requested to provide a valuation for any prospective third-party or investor purchase of Plaintiffs' businesses.
9. Hyde Valuations did not prepare the reports to provide a valuation for all of Plaintiffs' businesses, and did not intend the reports to provide guidance for the price an investor might pay for one or more of their businesses.
10. By way of example only, for a prospective buyer of the company, Hyde Valuations would have instead prepared an investment value perspective in this industry, accounting for synergies and the businesses' significant growth prospects. The draft report requested by Plaintiffs' outside counsel did not account for these critical factors, because the reports were not prepared to value the company for a prospective buyer.
11. I understand that Mr. Longmore did review the draft report provided by Hyde Valuations, Inc., but I am not aware of whether he relied on the report in providing legal advice to Plaintiffs concerning the restructuring or the tax implications thereof.
12. The report at issue is in draft form and no final version was ever created, nor did Mr. Longmire request Hyde Valuations, Inc. to prepare a final version of the report.
Id., ¶¶ 7-12.
TravelPass has not sufficiently shown the Hyde valuation enabled the giving of legal advice. Thus, the Court finds the attorney-client privilege does not apply to the valuation.
c. Work-product doctrine
Rule 26 of the Federal Rules of Civil Procedure codifies the work-product doctrine and provides in part that:
[A] party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But ... those materials may be discovered if: (i) they are otherwise discoverable under Rule 26(b)(1); and (ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.
FED. R. CIV. P. 26(b)(3)(A). The Fifth Circuit Court of Appeals has described the standard for determining whether a document has been prepared in anticipation of litigation:
It is admittedly difficult to reduce to a neat general formula the relationship between preparation of a document and possible litigation necessary to trigger the protection of the work product doctrine. We conclude that litigation need not necessarily be imminent, as some courts have suggested, as long as the primary motivating purpose behind the creation of the document was to aid in the possible future litigation.
Moser, 2019 WL 236722, at *3 (quoting United States v. Davis, 636 F.2d 1028, 1040 (5th Cir. Unit A Feb. 1981) (citations omitted in Moser)). “Among the factors relevant to determining the primary motivation for creating a document are ‘the retention of counsel and his involvement in the generation of the document and whether it was a routine practice to prepare that type of document or whether the document was instead prepared in response to a particular circumstance.’ ” Id. (quoting Navigant Consulting, Inc., 220 F.R.D. at 477 (quoting Elec. Data Sys. Corp. v. Steingraber, Civil Action No. 4:02 CV 225, 2003 WL 21653414, at *5 (E.D. Tex. July 9, 2003))). If the document would have been created without regard to whether litigation was expected, it was made in the ordinary course of business and is not protected by the work-product doctrine. Id. The work-product doctrine is not “an umbrella that shades all materials prepared by a lawyer, or agent of the client[,]” and the doctrine excludes materials assembled in the ordinary course of business. Id. (quoting United States v. Homeward Residential, Inc., Civil Action No. 4:12-CV-461, 2016 WL 1031154, at *3 (E.D. Tex. Mar. 15, 2016) (citing Elec. Data Sys. Corp., 2003 WL 21653414, at *4)).
*15 TravelPass does not demonstrate that the document at issue was prepared in anticipation of litigation, and as such, TravelPass does not demonstrate that the protection of the work-product doctrine applies to the document. See Moser, 2019 WL 236722, at *3 (noting the documents were created for an audit conducted by KPMG in 2016 and further noting that, although the documents may contain summaries of litigation prepared by attorneys for Navistar, the primary purpose behind the creation of the documents was not to aid in possible future litigation, but to aid KPMG in conducting the audit).
d. Relevance of the Hyde valuation
TavelPass asserts the amount of the valuation and basis for that valuation as contained in the Hyde Report are not relevant to evaluating Plaintiffs' damages claims in this case. According to TravelPass, the Hyde Report was requested for tax purposes only—to provide guidance on the tax liability of a minority employee interest in Partner Fusion, Inc.—and was never intended to value the company for purposes of a potential third-party transaction. See McCoy Aff. at ¶ 8. In other words, TravelPass argues the draft report does not provide a meaningful or accurate picture of the price a third-party investor might have paid for Plaintiffs' businesses at the time it was created. See id. at ¶ 9-10.
Defendants contend “the proper valuation of TravelPass' business is highly relevant to TravelPass' damages claims.” Docket Entry # 434 at p. 4. According to Defendants, “that the Hyde valuation may have been performed for tax purposes does not shield it from discovery; TravelPass is free to make arguments regarding its accuracy to a jury but cannot pick and choose which valuations the jury may consider by foreclosing Defendants from relevant discovery.”[9] The Court agrees.
In the Eastern District of Texas, Local Rule CV-26 also provides guidance in considering whether information is relevant for discovery. The rule provides information is relevant if:
(1) it includes information that would not support the disclosing parties' contentions;
(2) it includes those persons who, if their potential testimony were known, might reasonably be expected to be deposed or called as a witness by any of the parties;
(3) it is information that is likely to have an influence on or affect the outcome of a claim or defense;
(4) it is information that deserves to be considered in the preparation, evaluation or trial of a claim or defense; and
(5) it is information that reasonable and competent counsel would consider reasonably necessary to prepare, evaluate, or try a claim or defense.
Matter of AET, 2018 WL 4201264, at *2 (quoting E.D. Tex. Local Rule CV-26(d)). Relevance “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case.” Id. (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (citing Hickman v. Taylor, 329 U.S. 495, 501 (1947))).
Finding the Hyde valuation relevant, the Court grants Defendants' motion to compel the production of the Hyde valuation. However, the Court does not compel the production of any other valuation at this time.
V. CONCLUSION
*16 Based on the foregoing, it is
ORDERED that Defendants' Motion to Compel (Docket Entry # 415) is GRANTED IN PART AND DENIED IN PART as specified herein. It is further
ORDERED that Defendants' Motion to Compel (Docket Entry # 441) is GRANTED IN PART AND DENIED IN PART as specified herein. It is further
ORDERED that to the extent it has not already done so, within twenty (20) days from the date of entry of this Order, TravelPass shall produce to Defendants the following: (1) TravelPass fact or expert witness deposition testimony (and exhibits) from the Expedia Arbitration; (2) the expert report of Jason Hachkowski offered in the Expedia Arbitration; (3) any TravelPass responses to interrogatories or request for admission discussing damages; and (4) the Hyde valuation.
SIGNED this 11th day of May, 2021.
Footnotes
The Court does not find oral argument would be helpful to the resolution of Defendants' motions. Therefore, Defendants' request for a hearing is denied.
TravelPass' claims against Caesars Entertainment Corporation, Hilton Domestic Op erating Company, Inc., Hyatt Corporation, Red Roof Inns, Inc., and Wyndham Hotel Group, LLC have been dismissed, leaving only TravelPass' claims against Marriott International, Inc., Choice Hotels International, Inc., and Six Continents Hotels, Inc. (collectively, “Defendants”).
Defendants' motion also moved to compel the production of settlement agreements with former defendants in this case. However, Defendants have since withdrawn that portion of their first motion to compel. See Docket Entry # 425.
The Utah court later dismissed the federal suit with prejudice in August 2020, following the resolution of the Expedia Arbitration.
Expedia states both TravelPass and Defendants have issued subpoenas to non-party Expedia in this litigation, seeking broad sets of documents. See Wallace Decl., Exs. 3 and 4. According to Expedia, in response to these subpoenas, it produced over 25,000 responsive documents in June of 2020. Wallace Decl., ¶ 6. Defendants subsequently served another subpoena on Expedia, seeking a corporate witness deposition. Wallace Decl., Ex. 5. Expedia states it also complied with this subpoena and presented a corporate witness for deposition in late February of 2021. Id. ¶ 7.
Specifically, TravelPass asserts as follows:
If the Court finds that some of the materials requested by Defendants' should be granted, Expedia should be permitted to redact confidential, irrelevant information at Defendants' expense, an offer that Expedia made to avoid the need for court intervention. Defendants have refused to permit any redaction, regardless of who bears the cost, citing general case law about the redaction of documents that contain both relevant and irrelevant content. Defendants' cases are inapposite because they do not involve litigation documents being sought from a confidential arbitration.
Here, Defendants seek litigation materials—deposition testimony, exhibits, and expert materials (rather than documentary evidence)—from a private arbitration conducted under a negotiated confidentiality protocol. None of Defendants' cases address this situation. Indeed, Defendants' case U.S. ex rel. Simms v. Austin Radiological Ass'n, 292 F.R.D. 378, 387 (W.D. Tex. 2013) supports redaction of irrelevant information when the producing party presents concerns about its confidentiality. There, the court held that the producing party could properly redact irrelevant information that was confidential. Id. at 387 (allowing redactions necessary to maintain confidentiality of certain financial and accounting information). See also Louis Vuitton Malletier v. Texas Int'l P'ship, 2012 WL 5954673, at *2 (S.D. Tex. May 14, 2012) (denying motion to compel unredacted documents). Here, Defendants seek materials from a confidential arbitration conducted pursuant to a valid and binding Protective Order (and over Expedia's objections). Should the Court decide to grant some or all of Defendants' motion, redactions are appropriate and necessary, and Defendants should bear the cost.
Docket Entry # 444 at pp. 5-6 (emphasis original).
On January 26, 2021, TravelPass' counsel confirmed that TravelPass has no objection to producing the information, other than the fact that the information might be deemed confidential under the protective order in the Expedia Arbitration. The Court agrees with Defendants that any such confidential information likewise would be protected under this Court's Amended Protective Order–which Defendants assert was specifically amended to accommodate Expedia.
According to Defendants, Mr. Leathers' report in this case cites to and expressly relies upon his Expedia report for the proposition that the damages he calculated in the Expedia case related only to “increased marketing costs.” See Dec. 30, 2020 Leathers Report at ¶¶ 52 n. 93; 169. Arguing this assertion appears to be false, Defendants state Mr. Leather's Expedia report asserts that Expedia caused $8 million in damages “as a result of keyword bidding restrictions imposed by Expedia” – the same type of damages that TravelPass now blames Defendants for in this case. Defendants argue Defendants, and the Court, require the supporting data and documents from Mr. Leathers' Expedia report “in order to untangle the harm TravelPass previously claimed was caused by Expedia from that allegedly caused by Defendants.” Docket Entry # 434 at p. 3.
According to Defendants' first motion to compel, TravelPass has relied upon business valuations performed by other third-parties, like Sorensen Capital, as a basis for its damages claims. Docket Entry # 415 at p. 6. Defendants argue all such business valuations should have been produced with TravelPass' initial disclosures pursuant to paragraph 3(a) of the Amended Discovery Order entered in this case. Id.